SHIFTING INTERNATIONAL TRADE ROUTES Derrick Smith VP, Emerging Markets January 24, 2014

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1 SHIFTING INTERNATIONAL TRADE ROUTES Derrick Smith VP, Emerging Markets January 24,

2 CSX provides the efficiency of rail transportation 21K miles of infrastructure 31K employees $12B in revenue Serves almost 2 / 3 of the nation s population large consumption markets Reaches over 70 coastal & inland ports 2

3 U.S. economic outlook generally looks promising GDP Imports 6.5% Exports 6.6% 6.2% 2.8% 1.9% 3.2% 3.4% 3.2% 2.7% 2.2% 1.4% 4.7% 5.1% 4.2% 3.5% 2.5% 5.1% 4.6% '12 '13 '14 '15 '16 '17 '12 '13 '14 '15 '16 '17 '12 '13 '14 '15 '16 '17 3 Source: Global Insight January 2014

4 CSX volume rebounding but with a significant change CSX Volume History Units in Thousands 7,359 7,115 6,827 5,793 6,291 6,476 6,409 6,539 7,358 24% 6,539 6% 12% 30% 39% YOY Volume Growth % - -% (3%) (4%) (15%) 9% 3% (1%) 2% 44% 43% 4 Note: 2010 is shown on a 52-week basis

5 Mix changes consistent with North American railroads Petroleum & Petroleum Prods % Nonmetallic Minerals & Prods. Intermodal +4.6% Motor Vehicles & Parts Chemicals Total traffic grew 2.1% in Forest Products Metals & Metallic Ores Coal -3.6% Agricultural & Foods Prods. -5% 0% 5% 10% 15% 20% 25% 30% Annual Change 5 Source: AAR Rail Time Indicators January 2014

6 North American crude oil production is rapidly growing U.S. Crude Oil Consumption Thousands of Barrels per Day 15,000 14,500 6,509 2, ,356 2,408 9,700 1,015 3, Actuals 2020 Forecast Country of Origin Canada Saudi Arabia Mexico Venezuela Nigeria All Others US Production Bakken and Niobrara will be primary rail sources to the East Shale drives production growth 1.7M bbls/day 2012 Growing to 3.5M bbls/day by 2020 Fuel efficiency standards decreases consumption Imports decline to <7% of consumption A path toward independence by Source: Energy Information Administration, Canadian Association of Petroleum Producers

7 Increasing global trade fuels intermodal growth North American Intermodal Volume P 2012 volume increased more than fourfold 14.6M 16.5M 3.1M Source: AAR, Intermodal Association of North America, FTR

8 CSX positioned to convert more traffic to rail Nine million addressable loads in Eastern freight market Ensure double stack clearance on core routes Provide greater terminal capacity Optimize port access Promote truck conversions 8

9 Infrastructure projects support increasing demand National Gateway $850 million public/private partnership. 47 of 64 clearance projects and 5 of 7 intermodal terminals completed. District of Columbia Partnering to invest ~$160 million for new double stack cleared Virginia Avenue Tunnel in Washington, DC Florida CSX made $500 million commitment to invest in FL Winter Haven intermodal terminal to open 2Q Massachusetts As of 2012, CSX is double stack cleared to Worcester Invested over $100 million in new intermodal terminals in Worcester and West Springfield 9

10 Greater highway congestion likely increases rail usage Today Freight demand projected to grow more than 60% by 2040 Governmental budget issues amplify highway funding challenges Truck driver shortage and increased operating costs creates rail conversion potential Railroads are 3-4 times more fuel efficient than highway transportation Source: USDOT FHWA Freight Analysis Framework

11 Governmental actions continue to have a major impact Regulatory Compliance Safety standards affecting onboard Locomotives and tender cars must technology be developed and (PTC) available or car design Environmental Policy Guidelines Locomotives for and fuel tender emissions cars or permitting must be developed and available Public-Private Partnerships Funding alternatives for port or rail infrastructure improvements Railroads invested over $13B to grow and modernize (2013) 11 Source: Association of American Railroads

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